Friday, March 1, 2013

sequestration and fiscal crisis: the real hidden story

It's not exactly hidden why things fell apart. Anyone with open eyes could see it. But it takes a lot of energy to keep one's eye's open... unless one makes a habit of it.

It's not just the sequestration which hit today, but the larger context which it is part of.

A couple of months ago, I posted my analysis, predicting why the sequestration talks then underway
were doomed to failure - unless some new elements were introduced. So many people assumed that of course that could not be so... of course the experienced folks on the Hill would once more barely escape disaster. But that kind of past experience failed. Logic did not.

However - in his State of the Union speech, Obama clearly had some insight into what was going on.
In amidst all the expected partisan stuff, were two vey concrete suggestions for how to
avoid sequestration (or at least better balance jobs and debt) which should be bipartisan:
(1) reductions in medical costs, especially medicare, based on a combination of efficiency and things Republicans have been clamoring for; (2) a restructuring of taxes, especially corporate taxes, to result in less loopholes, lower overall rates, and net revenue -- something which prominent Republicans had been clamoring for just a few weeks before!!

Why no follow-up on these two rather crucial offers?

It's pretty clear from the press. Honest Republicans and sincere Tea Party people and people who wanted to stimulate small business might have wanted to accept what they had already promised and asked for. But there are internal deep divisions in the Republican party. The folks on the take form special interests who want their loopholes wouldn't unite. And, under the corporate culture which declares they must have a united front... the honest folks felt morally compelled to
give up their principles and give up the US economy. Perhaps a straight outreach from Obama to key Tea Party folks, bypassing the other guys... might have gotten some distance... or perhaps not.

So we will see...

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